Fewer Outlets, Higher Quality
The number of convenience stores in Japan continues to decline, with the latest figures showing a year-on-year drop of 0.2% to 55,620 in March 2024. This marks the 22nd consecutive month of decline, the longest streak since data became available in 2005.
Despite the shrinking number of stores, the industry's combined annual domestic sales reached a record high of over 11 trillion yen ($72.66 billion) in 2023. This suggests that while the number of outlets is decreasing, the remaining stores are becoming more profitable.
Several factors contribute to this trend. Firstly, the market is saturated, with fewer locations offering profit potential, especially in non-urban areas. Secondly, franchisees are hesitant to open new stores due to rising personnel costs, utility expenses, and labor shortages.
Relocating stores to better locations: Chains are moving stores to areas with higher foot traffic and better visibility.
Seven-Eleven Japan plans to open compact stores in office buildings, replacing employee cafeterias. These stores will be smaller and use self-checkout technology.
FamilyMart has been leading the way in unstaffed stores, with over 30 locations in office buildings and other facilities.
Lawson is exploring partnerships with mobile carrier KDDI and trading house Mitsubishi to sell its products in cellphone shops.
These changes suggest that the convenience store industry in Japan is entering a new era. The focus is shifting from quantity to quality, with an emphasis on providing customers with a better experience and leveraging technology to improve efficiency.